Goldman Sachs is considering giving bankers and traders referral bonuses when they send business to its private bank, the Financial Times reported Saturday.
Goldman executives are considering relying on a formula to calculate bonus pay for those who make such referrals, people familiar with the matter told the publication.
Currently, the bank rewards employees who collaborate with other units through a discretionary bonus. Some Goldman executives have argued against transitioning to a fixed formula in the past, asserting that “such a move should not be necessary,” the FT reported.
No final decision has been made, those familiar with the situation told the FT. A bank spokesperson declined to comment on the matter to the FT and did not return a request from Banking Dive.
Ushering clients into its private bank would make Goldman’s business less susceptible to the ups and downs of trading and investment banking.
UBS was considering a similar referral system earlier this month, people familiar with the matter told Bloomberg; Credit Suisse had offered referral bonuses to its deal makers in the past. Sources of the FT said UBS executives opted not to follow through with those plans, because of the complication involved and that investment bankers don’t need added bonuses.
At Goldman, clients must have a minimum of $10 million to open a private bank account. The average size of an account is roughly $70 million, the FT reported.
